Undead ideas Dep’t: Buying the opium crop

If we buy the Afghan opium crop, Afghan poppy farmers will grow two crops, one to sell to us and the other to sell to the refiners.

Glenn Reynolds, commenting on reports of a bumper opium crop in Afghanistan, writes:

I’m still not sure why the United States doesn’t start buying the stuff from farmers, which at the very least would drive up prices and put the squeeze on the warlords.

Answer:

Because there isn’t a natural limit on poppy production. Whatever we buy will be replaced, out of current inventories (opium is a good store of value, so farmers hold some of their savings in the form of opium) or out of additional plantings. It’s virtually impossible to prepare a massive buyback program without word leaking out in advance. So if we try to buy the Afghan opium crop, Afghan poppy farmers will grow two crops, one to sell to us and the other to sell to the heroin manufacturers.

Whatever we pay, the refiners can afford to pay more. The price of opium is trivial compared to the price of heroin: $500 worth of opium makes a kilogram of heroin, worth $100,000 at import to the U.S. and $500,000 on the street. The warlords would barely feel it.

With sufficient enforcement effort, it’s sometimes possible to move drug production from one country to another, but controlling the heroin problem by controlling the poppy crop is a mere chimera, and known to be so by everyone with any economic training who has looked at the problem. Our drug problem, if it’s going to be solved, has to be solved here.

The concept of buying drug crops is a zombie meme, an Undead idea: No matter how often it’s killed and no matter how many analytic stakes are driven through its heart, it keeps moving. But it is utterly and totally without any merit whatsoever.

As to the warlords: those are the people we supported in overthrowing the Taliban. (The Northern Alliance is more or less a trade association of opium and heroin merchants.) With the Taliban resurgent, this wouldn’t seem like an ideal time to be putting the squeeze on the enemies of our enemies.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

11 thoughts on “Undead ideas Dep’t: Buying the opium crop”

  1. Say, I've seen some inflation in my time, but yesterday a Seattle police officer, in the Seattle P-I, estimated the value of a pound of heroin in Seattle at $60,000.
    Sadly, he did so in this context- arrests of over 400 street level sellers, of whom about 370 will be charged with felonies, and claims that this enforcement operation had increased the amount of time it took to 'score' on the street from five minutes to 45 minutes- claims local residents disputed.
    So, whatever the cost to the user, the cost to the police, and the citizens who pay them, of that pound of heroin was much greater than $60,000. They seized about seven pounds of drugs while arresting 400 people.

  2. "Because there isn't a natural limit on poppy production. "
    Seems to me that, unless you're claiming that Afghanistan has an infinite area, (In fact, I believe the cultivatable area is relatively small.) this clearly isn't true. But you do make a good case that buying the opium probably isn't a practical option.
    Of course, if we dropped our price support programs here, the price would drop there, and growing something else might become economically sensible.

  3. Who the hell is claiming that Afghanistan is the only place in the world that produces opium?
    Or do you have some grand plan to bushisize the war on drugs just like the war on terror — the US will buy opium from Afghanistan but not from, say, Burma and this will, in some mysterious fashion, both reduce the heroin problem and increase the prestige of the US?
    On a more serious note, just how difficult is the synthesis of morphine (or straight heroin if that is easier)? My point being that if all the opium production in the world were destroyed, would the effect simply be to convert heroin to a meth/ecstasy type factory drug with perhaps a factor of two change in price, or is this sort of synthesis currently impossible, or if not impossible the sort of tour-de-force of a research university that's not going to be replicated in bulk in a hidden lab in the desert somewhere.

  4. So what you are really saying is that the idea of buying up the poppy crop is an effort by the drug producers to expand their market to include the U.S. government.
    That's just good marketting if you can easily expand production without a great deal of fixed costs.

  5. It's possible that the price of a (pure) kg. of heroin is now as low as $60,000. It's also possible that the price being quoted is for "cut" (diluted) material.
    Yes, the fentanyl family of synthetics is now illicitly producible at prices competitive with heroin, and is starting to appear on the streets. Since the fentanyls are far more potent, the initial result has been a rash of overdose deaths.
    REMINDER: This comments section operates under "play nice" rules: no insulting other commenters. "Don't be stupid" counts as an insult.

  6. M.K. wrote:
    "…but controlling the heroin problem by controlling the poppy crop is a mere chimera, and known to be so by everyone with any economic training who has looked at the problem. Our drug problem, if it's going to be solved, has to be solved here."
    The first step in solving the "drug problem" is to recognize that the problem is prohibition, not drugs.
    I've known many heroin addicts, and I've never met even one who was influenced by the drug to engage in criminal behavior. In those people who did engage criminal behavior (besides possessing and using the drug), the cause of their behavior was prohibition directly — the price of the drug, and the means of obtaining it, hence the price and means of not undergoing withdrawal, was more than they could afford to pay from legal employment.
    One addict I knew practiced medicine, and unquestionably saved the life of a close relative of mine. Another ran a very highly rated and profitable legitimate business for decades. Most were ordinary people, leading ordinary lives, except for their addiction. While a few addicts I've known were petty criminals, they were petty criminals before they became addicts. If the drug were available to most addicts, even if only by prescription as a psych med, most would lead law abiding, and even remarkably productive, lives.
    Only three groups profit from drug prohibition laws: drug dealers, prohibitionist politicians and policymakers, and narcotics cops. Ordinary citizens pay a terrible price in loss of all meaningful civil liberties and property rights, terror and murder by SWAT teams on bogus raids, proliferation of AIDS and HepC by contaminated injection equipment, and, adding insult to injury, higher taxes to pay prohibition enforcers' and policymakers' salaries.

  7. "The first step in solving the "drug problem" is to recognize that the problem is prohibition, not drugs."
    Exactly. The only subject left out of your post is the cost of the jails and prisons warehousing those arrested and convicted, over the lengthy terms of zero discretion sentencing.
    Mark K makes the point there is no solution on the supply side. There isn't one to the demand side either. The only rational policy option is dealing with fallout. With the addicts it is treatment, if they can be treated before killing themselves.
    Most of the violence, the toxic waste cleanup (meth labs), etc. are purely results of probibition.

  8. M.K.
    Serial catowner's price was a pound of heroin for $60K yours were in kilograms. $60K*2.2 = $132K/kg according to the Seattle PD officer. Right in line with your estimates.

  9. Let me get this straight — Instapundit, a libertarian who has been known to disparage American farm subsidies, thinks that the U.S. government should subsidize Afghani opium farmers?
    Is there a difference between 'buying up excess supply' and farm subsidies? It's the same idea, right?

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